Scottish Budget 2020-2021

Chapter 4: Pre-Budget Scrutiny by Parliamentary Committees

This chapter provides a summary of how pre-budget scrutiny from the Scottish Parliament's committees has influenced the formulation of the Scottish Budget.

Culture, Tourism, Europe and External Affairs Committee

The Culture, Tourism, Europe and External Affairs Committee's scrutiny of the 2020-21 Budget focused on cultural participation.

The 2020-21 Budget continues to fund cultural programmes, engagement and participation and this will be invested under the priorities to be set out in 'A Culture Strategy for Scotland 2020'. We have confirmed the first year of funding for the Cultural Youth Experience Fund called for by the committee, and further protected investment for our young people by maintaining the Youth Music Initiative at £9 million. In addition, we have delivered the third year of additional funding for Creative Scotland to offset the reduction in income from the National Lottery and will continue to monitor lottery income trends.

Economy, Energy and Fair Work Committee

The Economy, Energy and Fair Work Committee focused its pre-budget scrutiny on Regional Selective Assistance (RSA) and other financial support for businesses provided by Scotland's enterprise agencies. Specifically, it was interested in whether RSA helps businesses become more productive and internationally-focused, whether RSA impacts employment levels and fair work practices and the future of such support mechanisms.

It made a number of recommendations including the use of data to support budget scrutiny and provide information on job outcomes, regional spend on RSA, and providing and publishing gender disaggregation of companies receiving RSA and evaluating economic development and inclusive growth.

The Enterprise and Skills Strategic Board's Analytical Unit has developed, in collaboration with agencies, a Performance Framework which will inform how Scotland compares with international peers on productivity, equality, wellbeing and sustainability. The framework is consistent with the National Performance Framework and a detailed assessment of performance was presented to the Strategic Board in the Annual Analysis report in January 2020.

The committee also raised concerns about the uptake and the future of the Scottish Growth Scheme and the Cabinet Secretary for Finance, Economy and Fair Work will keep the committee informed of progress. With the Scottish National Investment Bank becoming operational in 2020, it provides the opportunity, where appropriate, to consolidate existing public financing activities provided by the Scottish Government and its agencies and build on the success of operations and initiatives currently underway. It will align with, and complement, activity by the Enterprise Agencies and other public bodies.

Education and Skills Committee

The Education and Skills Committee has consistently raised the issue of funding within schools for children and young people with additional support needs.

The committee asked specific questions about our Programme for Government commitment to invest an additional £15 million to improve implementation of additional support for learning across Scotland. In 2020-21, we will continue to provide national funding of £10.5 million to support learning provision for children and young people with complex additional support needs. This funding will be used to enhance support for children and young people who learn in the grant-aided special school sector in Scotland.

In addition to this, to reflect our continued commitment to supporting implementation of Additional Support for Learning (ASL) we have allocated an additional £15 million to enhance the provision of front-line staff. This is in line with the committee's recommendation that funding for ASL continues to be a priority for this Government. We have a joint agreement with local government on how this additional funding will be distributed.

Environment, Climate Change and Land Reform Committee

The Environment, Climate Change and Land Reform Committee's pre-budget scrutiny built on its earlier work on preventative spend, the carbon impact of the capital budget and funding following the UK's departure from the European Union.

The committee commended both the approach and commitments that Scottish Government has made to tackle climate change and reduce emissions. The Scottish Government remains firmly committed to meeting our ambitious climate change targets and increasing annually our spend on low carbon infrastructure projects.

More can be done in accounting for climate change in the budget and we are taking steps to do so, including the commissioning of new research such as ClimateXChange and undertaking jointly with the committee a review of budget information as it relates to climate change.

Equalities and Human Rights Committee

We welcome the Equalities and Human Rights Committee's scrutiny of the 2020-21 Budget and in particular the recognition of the value of the third sector, and the call to protect both the equality and human rights and the third sector budget lines. In this budget we have increased the Equality and Human Rights budget to £30.2 million, its highest ever level, representing our commitment to embedding equality, inclusion and human rights across all portfolios. It is estimated that the public sector as a whole accounts for around a third of the third sector's income, which supports the work of charities and social enterprises. The dedicated Third Sector Budget, which stands at £24.6 million for 2020-21, represents between one and two per cent of total public sector investment in the third sector. The majority of this funding is provided to enable the growth of social enterprises through our 10-year strategy to national support organisations such as SCVO and Volunteer Scotland and local support organisations - Third Sector Interfaces. These organisations allow the sector a local and national voice to influence public policy and support the capacity of Scotland's vibrant third sector.

The committee also explored the links between the budget process and the National Performance Framework. We are working in partnership with local government, the health sector and a wide range of representatives from across the third sector and public bodies, to drive an action-oriented, values-based shift across Scotland's public services towards achieving the outcomes set out in the National Performance Framework.

Finance and Constitution Committee

The Finance and Constitution Committee raised a number of issues in its pre-budget scrutiny report. The committee highlighted its interest in exploring the risks and opportunities for the Scottish Government's Budget arising from tax devolution and the operation of the Fiscal Framework. The committee also focused on the publication of outturn data for Scottish income tax for 2017-18, noting potential structural risk to the Scottish Budget. The committee also raised other points including the Additional Dwelling Supplement and VAT Assignment.

The Scottish Government welcomes the committee's input on these issues and will keep the committee and Parliament informed on developments. We note the potential risks relating to devolution of tax powers and the operation of the Fiscal Framework, and continue to press the UK Government for extra flexibility to manage the volatility inherent under the Fiscal Framework.

We will also continue to work with the Scottish Parliament and UK Government to improve transparency and increase public understanding in relation to fiscal devolution.

Health and Sport Committee

The Scottish Government agrees with the committee's emphasis on the importance of community-based services. Everybody should have access to the right care in the right place at the right time and where hospital-based treatment is the right clinical option, no one should spend unnecessary time in hospital once treatment is complete. These priorities are reflected in our Health and Social Care Medium Term Financial Framework and the continued shift in the balance of spend each year over the course of this parliament.

The findings of the committee's report are consistent with the Scottish Government and COSLA's joint review of progress with integration. We are making progress in reducing delayed discharge and want to go further to improve performance. We have established a Delayed Discharge Expert Support Team to support the Integration Authorities, and their partners in health boards and local authorities, that are facing the most significant challenges and ensure sustainable progress can be made. Our investment in primary care is a key driver to improve the scale and pace of integration of health and social care.

In February 2019 the Ministerial Strategic Group (MSG) published a progress report which sets out priority actions across a range of areas, including actions to ensure integrated budgets are fully operational. Work continues under the scrutiny of the MSG to ensure appropriate budget arrangements are in place in local systems.

Justice Committee

We welcome the ongoing budget scrutiny undertaken by the Justice Committee's Sub‑Committee on Policing and in particular its review of Scottish prisons and the capital budget of the Scottish Police Authority (SPA).

The Scottish Government has acknowledged the significant pressures facing Scotland's prisons, including with reference to the prison population. During 2019-20, additional funding was provided to the Scottish Prison Service to assist in dealing with these pressures, including for additional prison places. The Scottish Budget 2020-21 reflects Scottish Ministers' commitment to invest in prisons revenue and capital infrastructure, including for the new female custodial estate and a replacement for HMP Barlinnie. Substantial funding is also committed towards local authority and third sector community justice services, including effective alternatives to short-term prison sentences and remand.

The Scottish Government is committed to working closely with the SPA and Police Scotland to ensure a modern police service fit for the 21st century, through supporting transformation as outlined in the 10-year policing strategy, 'Serving A Changing Scotland'. This will also ensure that the SPA can make a positive contribution to tackling the climate emergency through initiatives such as greening the police fleet. The Scottish Government will continue to pursue funding from the UK Government to cover the policing and security costs of hosting the COP26 summit in Glasgow.

Local Government and Communities Committee

The committee's pre-budget scrutiny focused on a range of issues including the effect of single-year budget settlements for local authorities; certainty in the house-building budget post-2021 and funding for preventative spend, including housing adaptations; climate change targets in local government; and wider fiscal reform and empowerment in local government.

In coming to the decision to announce the Scottish Budget before the UK Budget, the Scottish Government has listened carefully to representations made by the Convention of Scottish Local Authorities (COSLA) on behalf of local government about the damaging impact any further delay would have on vital local services. Due to the lack of future funding figures from the UK Government and unreasonable constraints to the timetable for producing the Scottish Budget 2020-21, the Scottish Government has no option but to provide local government with a single year settlement. However, the Scottish Government is committed to providing local government with long-term financial certainty and will continue to work with COSLA, and press the UK Government to carry out a multi-year spending review to ensure that long-term financial certainty can be provided to our partners in local government at the earliest possible opportunity.

The committee also kept a watching brief on the performance of Integration Authorities in relation to housing adaptations. We are committed to our vision that everyone should be able to live in a home that meets their needs and supports them to live independently. The committee's scrutiny continues to provide useful information that supports the work we have started to provide strategic and practical support to Integration Authorities, and their partners in health boards and local authorities, to improve delivery and funding arrangements for adaptations.

Rural Economy and Connectivity Committee

The Rural Economy and Connectivity Committee pre-budget scrutiny report covers a range of recommendations on roads maintenance issues. In undertaking budget scrutiny, the committee sought to build on Audit Scotland's reports on roads maintenance by scrutinising the efficacy of the current approach to maintenance and the adequacy of current expenditure levels.

The Scottish Government is committed to ensuring that the trunk road network remains safe and fit for purpose, and has a robust and established process for monitoring the condition of roads. The Transport Scotland Road Asset Management Plan (RAMP) sets out how Scotland's trunk road network is maintained strategically and efficiently in order to support the operation of the Scottish economy, protect our assets and ensure maximum value for money from our road maintenance activities.

The Scottish Budget 2020-21 sets out an ambitious programme of infrastructure investment which includes £1.4 billion for investment in our transport infrastructure. We are investing £466 million in managing, maintaining, and safely operating the Scottish trunk road network in 2020-21.

Social Security Committee

The Social Security Committee commented on a range of issues in its pre-budget scrutiny report, including the Scottish Welfare Fund, the Scottish Fiscal Commission (SFC) forecasts and funding for the Scottish Child Payment.

Recognising increasing demand on the Scottish Welfare Fund in several local authority areas in the past year, we will increase funding in 2020-21 by £3 million, including £0.5 million for administration, to ensure that the Fund continues to provide assistance to people in crisis and to provide Community Care Grants.

We agree with the committee on the importance of effective communication with the SFC, and officials are working collaboratively with the SFC to ensure that we continue to embed best practice as we take on and manage new benefits.

The Scottish Government has allocated £21 million for the transformative Scottish Child Payment in this budget - the SFC has forecast expenditure from 1 December 2020 with the expectation that payments for eligible children under 6 will start by Christmas 2020. The SFC forecasts include benefit expenditure for the replacement to the current Disability Living Allowance for Children, but the decision was made not to cost Disability Assistance for Working Age People due to policy decisions still being made.

Further Pre-Budget Scrutiny Responses

In addition to the material contained in this chapter, following the publication of the Scottish Budget, each Cabinet Secretary or relevant Minister will provide a written response to the individual committee pre-budget scrutiny reports within five parliamentary sitting days of the publication of this budget.